The careers of Bill Gates and Steve Jobs – ranked one and four respectively in the 2005 business leader list – seem destined to stay intertwined, the yin and yang of the personal computing business.
On the one hand is the calculating, domineering style that has made Microsoft by far the world’s most successful software company: on the other hand the daring and creativity that has made Apple Computer the most consistently imaginative maker of personal technology.
A quarter of a century since their rivalry was born at the beginning of the PC era, the ability of both men to shape the experience of technology for billions of people – and to set the direction for a large part of the global tech industry – has left the companies they lead high on the list of the world’s most respected.
The technology business, however, is at a crossroads: thanks to the internet, the focus of computing has been shifting away from the PC, where Microsoft holds sway. Software applications that reside on the web rather than on any particular desktop machine – such as Apple’s iTunes – and new digital gadgets that have no, or only a tangential, relation to the PC – such as Apple’s iPod – could be the shape of things to come.
Even executives at Microsoft, Mr Jobs’ old nemesis, have apparently started to concede as much.
According to Ray Ozzie, Mr Gates’ new right-hand man in setting technology strategy, Apple has done “an enviable job integrating hardware, software and services into a seamless experience with dotMac, iPod and iTunes”.
That admission was contained in a recent memo to Microsoft staff, part of a rallying call to push the company into one of the biggest cultural shifts it has ever faced. The subtext: if Microsoft is to remain dominant, it will, in some important respects, have to start looking more like Apple.
Yet for now, Microsoft holds a central place in the computing world, its software acting as the platform on which a large part of the software industry depends. Despite its success, says Mr Ozzie, Apple “seems less focused on enabling developers to build substantial products and businesses”.
By contrast, Microsoft – which has pipped General Electric to top place in the main companies ranking for the first time – owes much of its power to its success in opening up its technology to outsiders, drawing them in to create products of their own that depend on Microsoft’s software foundations.
This is something that has turned Windows and, increasingly, Office into global standards. If it can use that approach to create a broader internet-based platform, it could remain dominant for years to come.
Microsoft’s continued presence high on the list of the world’s most respected companies follows another year of remarkable financial performance – even if its growth rate has just dipped below 10 per cent for the first time in its 30-year history.
With revenues of nearly $40bn in its fiscal year that ended in June and operating cashflow of $17bn, the world’s biggest software company remains a money-minting machine of unrivalled dimensions in the technology industry. With a slew of new products due to be launched over the next year or so, including new versions of Windows and Office, Microsoft’s growth rate is widely expected to bounce back into double digits.
Apple, up from 42nd to ninth in the main list, owes its renewed prominence to an unlikely comeback masterminded by Mr Jobs, who returned in the late-1990s to head the company he had co-founded.
When much of the tech industry is struggling with the effects of excess capacity and the difficulty of product differentiation in a world of common standards, Apple has proved that, with a strongly branded product and an integrated service, it is still possible to charge premium prices.
That seems to have been enough to convince Mr Gates that, in the future, success may just mean learning a lesson or two from a rejuvenated Mr Jobs.
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